Monthly Archives: August 2021

5 Tips for Accurate Project Estimation

The success of many projects is affected by known factors like budget, resources, and scope but also by unknown variables and risks. This is why many projects start on the wrong foot because the effort involved in delivering them has been underestimated. Our natural response is to want to deliver something well and timely but underestimating the complexities of a project serves no one.

Spending enough time analyzing and understanding the requirements and the proposed solution is critical to a project’s success for better decision support. There needs to be sufficient analysis to the point where you have uncovered all the risky areas to be able to quantify what is known and unknown about the solution.

To become better at estimating project effort, take into consideration the following tips:

Discuss Ground Rules & Assumptions Early….and Often

Estimating is an ongoing activity that should take place regularly throughout the project. In the nascent stage, a high-level (rough order of magnitude) estimate may be required to determine the feasibility of a project. But a more detailed analysis and estimate will be required as the project progress over time. Having said that, always discuss your ground rules and assumptions to back up or defend your estimate.  By discussing the ground rules and assumptions with customers early in the cost estimating process, analysts can flush out any potential misunderstandings.

Mirror to Gather Data

Doing the estimate itself is a small part of the estimating process. Much of the work is up front with data gathering, and on the backend with documentation and reviews. This is why it is very important to obtain the necessary data since this is a critical raw material for cost estimating.

There are many ways to obtain data, but this tip on mirroring can be applied when you are in conversation with someone that you need information from.

Mirroring is the repetition of keywords used by the other person you are communicating with. You should identify one to three key terms for mirroring. This tip is very effective when you are repeating these key terms that the other person just stated with a tone of genuine curiosity.

Mirroring lets the other person know you are paying attention to what they are saying, while mirroring with a tone of genuine curiosity will lead your counterpart to not only repeat themselves but to elaborate and offer additional details.

An example of mirroring might look something like this:

  • Your counterpart: “Unfortunately, we can’t afford that because we have a limited budget.”
  • You: “You have a limited budget?”

 

Cross-check with Different Tools/Techniques

Research and experiment with different estimation tools and techniques. Ask around in your organization to discover which tools other estimators or teams have used. Understanding how other estimation tools work and leveraging these tools for cross-checking your estimate will generally improve its defensibility and assure credibility.

Another way to cross-check your estimate is done by applying different techniques. For example, the analogy method is a very common technique used for cross-checking more detailed estimates (e.g., sanity check).

 

Use the Experts!

Involve experienced people in the analysis and estimation process and brainstorm with the people who will be doing the work. The overall cost of a project is always one of the most important items, and a subject matter expert (SME) can help lower project costs because of their experience. Inside your organization this might be a software specialist or engineer, program manager, or contracting officer.

Whoever they are, get them involved because their input can often change the scope and direction of a project. They may understand systems or processes that will alter your approach or may be able to provide an understanding around limitations of a prime mission product.

 

Document! Document! Document!

Formally record your estimates and document how you developed them. Make the estimated scope and assumptions clear and highlight what is out of scope. Not only will this put you in a better position to defend and adjust your estimate, but it will also help you review and improve your estimation process moving forward. And my biggest tip on documenting is to make sure you document as you go, do not wait until the last minute.